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High Court Of Madhya Pradesh
P. V. Dixit, C. J. and K. L. Pandey, J.
MADHYA PRADESH TRANSPORT CO.PRIVATE LTD. - Appellant
Versus
STATE OF MADHYA PRADESH - Respondents
Misc. Petn. 111 Of 1961
Decided On : 10/25/1961
MOTOR VEHICLES ACT, 1939 - SECTION 43 - MADHYA PRADESH MOTOR VEHICLES (TAXATION OF PASSENGERS) ACT, 1959 - SECTIONS 3, 4, 5, 6, 7, 8, 9, 10, 13, 16 - CONSTITUTION OF INDIA - ARTICLES 19 (1) (G), 301, 304 (B), 226, 227 - TAX ON PASSENGERS CARRIED BY STAGE CARRIAGES - VALIDITY - LEVY OF TAX ON OPERATORS - REVISION OF FARE TABLES UNDER SECTION 43 OF THE MOTOR VEHICLES ACT, 1939 - NECESSITY.
Fact of the Case:
The petitioners, transport companies holding permits under the Motor Vehicles Act, 1939, challenged the validity of the Madhya Pradesh Motor Vehicles (Taxation of Passengers) Act, 1959, on various grounds, including that it imposed a tax on operators and not on passengers, thereby violating Articles 19 (1) (g), 301, and 304 (b) of the Constitution.
Finding of the Court:
The court held that the Act imposed a tax on passengers and not on operators, and that the liability for payment of the tax was on the passengers. The court further held that the tax was not repugnant to Articles 19 (1) (g), 301, and 304 (b) of the Constitution, and that the duty imposed on the operator of collection of the tax from the passengers and of paying it to the Government could not be viewed as begar or forced labour.
Issues: 1. Whether the Act imposed a tax on operators or on passengers. 2. Whether the tax was repugnant to Articles 19 (1) (g), 301, and 304 (b) of the Constitution. 3. Whether the duty imposed on the operator of collection of the tax from the passengers and of paying it to the Government could be viewed as begar or forced labour.
Ratio Decidendi: 1. The court held that the Act imposed a tax on passengers and not on operators, based on the wording of Section 3 of the Act, which stated that "there shall be levied and paid to the State Government a tax. . . . . . . . at a rate equivalent to ten per cent. of the fare (inclusive of tax) payable to the operator. Of a stage carriage," and that the fare, including the tax amount, was payable by the passenger. 2. The court held that the tax was not repugnant to Articles 19 (1) (g), 301, and 304 (b) of the Constitution, as it did not interfere with the operators' right to carry on their business, did not affect inter-State trade, commerce, or intercourse, and the duty imposed on the operator was not begar or forced labour. 3. The court held that the duty imposed on the operator of collection of the tax from the passengers and of paying it to the Government could not be viewed as begar or forced labour, as it was a duty attached to the privilege of holding a permit for the running of stage carriages.
Final Decision: The court allowed the petitions and prohibited the respondents from enforcing the provisions of the Act against the petitioners unless and until the fare tables in respect of their stage carriages were revised under Section 43 of the Motor Vehicles Act, 1939, so as to authorize them to recover the tax amount payable under Section 3 of the impugned Act from passengers as extra fare.
( 1 ) THIS order shall also govern Miscellaneous petitions Nos. 112 and 113, both of 1961.
( 2 ) THESE are three petitions under Articles 226 and 227 of the Constitution of India by transport companies holding permits under the Motor Vehicles Act, 1939, challenging the validity of the Madhya Pradesh Motor Vehicles (Taxation of passengers) Act, 1959, (hereinafter referred to as the Act), on various grounds. The petitioners pray for the issue of a writ in the nature of mandamus for restraining the respondents from giving effect to the provisions of the Act or acting in any manner by virtue of or under the said Act. Alternatively they pray that if the act is valid, then a direction prohibiting the respondents from enforcing the Act as against them until the State Government issues a notification under Section 43 of the Motor Vehicles Act enhancing the maximum rate of fare in respect of the stage carriages run by them, be issued.
( 3 ) THE impugned Act was enacted in 1959. It came into force on 1st February 1961, which was the date appointed for the purpose by a notification issued under section 1 (3) of the Act. The long title of the Act is "an Act to provide for the levy of a tax on passengers carried in certain classes of public service vehicles in the state of Madhya Pradesh. " Section 2 is the definition Section. By Section 3 i't is inter alia provided that on the commencement of the Act under Section 1 (3), "there shall be leived and paid to the State Government a tax on all passengers carried by stage carriages at a rate equivalent to ten per cent of the fare (inclusive of tax) payable to the operator of a stage carriage. " section 4 enjoins that save as otherwise provided by the Act, no passenger shall be allowed to travel by the operator in a stage carriage unless he is issued a ticket in the prescribed form for the journey. Sections 5 to 7 deal with the submission of returns and payment of tax by the operator every month into the Government treasury. Section 8 lays down that if the whole or any portion of the tax leviable under the Act for any month has escaped assessment, then the Tax Officer may within the prescribed period assess the tax which has escaped assessment after issuing a notice to the operator. Section 9 empowers the Tax Officer to impose a penalty if the whole or any portion of the tax payable to the State Government in respect of any stage carriage for any period has not been paid in time. Section 10 is concerned with the recovery of tax amount as arrears of land revenue from the operator. Under section 13 every operator is required to keep and maintain accounts and registers in the prescribed form in respect of stage carriages and the fares collected in respect of passengers travelling therein. An operator is liable to punishment under section 16 if he submits an incorrect or incomplete return or fails to submit one or if he fraudulently evades or allows to be" evaded the payment of any tax due from him or fraudulently makes or allows tobe made wrong entries or omissions in the accounts or registers maintained by him or if he wilfully acts in contravention of any of the provisions of the Act or any of the rules made thereunder. These are the provisions with reference to which it has been contended that the Act levies a tax on operators and not on passengers and, thereore, offends against Articles l9 (1) (g), 301 and 304 (b) of the Constitution.
( 4 ) IN Mahamaya Motor Transport Co. v. State of M. P. M. P. No. 29 of 1961, 25-9-1961 (MP) the validity of the Act was questioned On grounds similar to those taken in the present petitions. All the grounds of attack failed in that case and it was held by a Division Bench of this Court that the tax imposed by the Act is in 'pith and substance' a tax on passengers carried by road falling within Entry-56 of list II of the Seventh Schedule of the Constitution; that the liability of the tax is on the operators and not on the passengers; that the tax is p
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